Tech

Anyone who regularly uses Bitcoin will have noticed the Bitcoin transaction fees have recently exploded. Every transaction on the Bitcoin network includes a fee, paid to reward the Bitcoin miner that processes the transaction. With Bitcoin’s recent explosion in popularity, the fee to process at Bitcoin transaction within a reasonable time can be £10-£30. Many Bitcoin wallets will allow you to set a lower fee, should you wish, but this often leads to a transaction becoming ‘stranded‘ for weeks before it is confirmed.

Bitcoin transaction fees on Bitbargain, 30th December 2017

My preferred Bitcoin supplier has been UK based Bitbargain for many years. However, as you can see above, at present the Bitcoin transaction fee can be over £15. This fluctuates throughout the day based on demand, and in recent weeks the lowest available fee has often been over £20. For smaller transactions, this can mean the fee paid exceeds the value of the transaction.

Not too long ago, this fee would have been a matter of pence. Paying an additional fee of £2-£3 would result in an expedited transaction and confirmations within minutes. Unfortunately at present, this is not the case, and my advice would be to use alternative coins such as Litecoin or Bitcoin Cash in lieu of Bitcoin where possible. These altcoins offer much faster confirmations with negligible fees of a few pence.

Awesome Miner now supports changing the payout cryptocurrency when ‘managed profit switching’ on Zpool, AHashPool, and Hash Refinery. This guide sets out how to set the Awesome Miner payout cryptocurrency in short, simple steps.

MiningPoolHub is slightly different, as you can simply register for an account on their website and change the payout currency by modifying your auto-exchange settings. This avoids the need to peform any of the configuration described here, but also tends to offer lower returns than other pools. As I understand it, recently hacked Nicehash only support BTC payouts at present.

Typically, these mining pools will default to paying out in Bitcoin, however, many now wish to use an alternative coin to spread their investments, or simply avoid the massive Bitcoin fees and transaction processing times.

It’s always been possible to set the Awesome Miner payout currency by appending the command sent to the mining software with a short code such as ‘c=LTC’, but this wasn’t easy to implement when managing your operation though Awesome Miner.

For years, I’d dismissed the suggestion that I should start mining ‘bitcoins’ (read: altcoins) as something that wasn’t worth the effort. I was under the misconception that it would require significant effort to stay on top of which coins were most profitable altcoins, and expected it would be difficult to exchange niche coins for useful currency. There was also the perceived risk that whatever most profitable altcoins I’d spent weeks mining could collapse in value, leaving me with nothing.

It turns out, the crypto-mining game is way ahead of me on this. There is no shortage of mining pools that, combined with the right software, allow you to always mine the most profitable altcoins, and have them auto-exchange to Bitcoin, Litecoin, or a cryptocurrency of your choice.